Most Expensive Homes in the U.S. 2006: Northeast

In some parts of the U.S., housing prices are shifting uncertainly to the east and west. In others, they are sliding south. But in a small and very exclusive slice of the market, they are still headed due north.

"Prices are going up," says high-end broker Ray Smith of Prudential Douglas Elliman, whose $62.5 million Southampton, N.Y., listing comes in third on our list of the most expensive homes in the Northeast.

For the third year in a row, we have compiled a ranking of the most expensive homes on the market in the country. In May, we determined the ten priciest palaces overall; throughout June, we will be releasing four regional lists, of the most expensive homes in the Northeast, Southeast, Midwest and West.

As usual, our roster of the most expensive homes in the Northeast includes a diverse range of properties--sprawling oceanfront estates, palatial penthouses, historic limestone townhouses and suburban stunners. But for the first time they all have something in common besides high prices: They are all in New York.

Each and every residence is in the Empire State, from the Upper East Side of Manhattan to Long Island's Gold Coast to the posh Hamptons. The vast concentration of wealth in the city is one reason; the extreme desirability of these locations is another.

As lofty as these prices seem, homes do actually sell for such sums in the Northeast. An over-the-top $40 million estate in Alpine, N.J., has changed hands since making our list last year. A $53 million Greenwich, Conn., property that ranked in 2004 also has new owners.

These sales don't compare to the activity seen in New York over the past couple of years. Among the mega transactions that took place in 2005 were the $44 million sale of the late Laurance Rockefeller's Fifth Avenue triplex to
News Corp.
head Rupert Murdoch. He was topped by pharmaceuticals billionaire Stewart Rahr, who purchased Burnt Point, a Hamptons estate, for $45 million.

This year, a Russian immigrant snapped up a Beaux-Arts mansion in Manhattan for $40 million, 20% below the asking price that put it on our most expensive list in 2005. That was just several weeks after hedge funder Daniel Loeb threw down $45 million for the penthouse at 15 Central Park West, a Robert A.M. Stern-designed building that hasn't even been completed. Such deals have encouraged owners and brokers of the highest-end properties to price their places more aggressively.

A few years ago, the penthouse at the top of 823 Park Avenue would have been priced high. It offers, after all, a rare opportunity to buy a prewar condominium in Manhattan, where the vast majority of buildings--especially old, elegant, covetable ones--are co-operatives that come with plenty of ownership restrictions. But it may not have reached its current asking of $49 million, says broker Kathleen M. Sloane, with Brown Harris Stevens.

"What we have seen is some newly achieved price points in the city," she says. "An instructive project was 15 Central Park West, which is new but has classic floor plans."

Apartments there have sold for prices in excess of $4,000 a square foot, she says. The average price per square foot for Manhattan in the first quarter of 2006 was a hair over $1,000, according to New York City-based real estate appraisal and consulting firm Miller Samuel.

The most expensive property in the Northeast remains the same as last year: Three Ponds, a 60-plus-acre Bridgehampton estate that has lingered on the market for some time.

But the sky-high sales prices the market has seen go some way toward explaining why, in 2005, the lowest price on our list was $39 million, but this year, it was $47.5 million, for a Fifth Avenue penthouse also that has yet to be completed. The average price of a house on our list has also climbed, from $49.4 million in 2005 to $56.7 million this year. An impressive ascent, indeed.

In compiling our list, we examined listings and spoke to real estate brokers around the region. We did not include listings that are privately being shopped around or "pocket listings," properties that might be available for sale to the right buyer, should one happen along. We also didn't include homes if we couldn't confirm with brokers or owners that they are currently on the market and that their prices are accurate.